India retail reforms face broad alliance of foes

NEW DELHI -- The ruling Congress party has rolled out its big guns to defend the move to let the likes of Wal-Mart set up shop in India, but they are confronting an alliance stretching across the political spectrum.

Prime Minister Manmohan Singh's left-leaning government announced in September that it was lowering the bar for foreign firms to operate in sectors ranging from retail to insurance, in a bid to revive its fortunes before elections in 2014.

But by leaving it up to individual states to decide whether they want to implement them, analysts say the retail reforms are in danger of fizzling out as opponents ranging from communists to right-wing nationalists mobilize resistance.

Congress party president Sonia Gandhi and even her son Rahul — the scion of the Nehru-Gandhi dynasty — spoke at a mass rally in Delhi on Sunday to espouse the benefits of the reforms before tens of thousands of supporters.

“We need economic reforms because only when businesses operate well will there be progress, and then we can run programs to benefit the poor,” said Rahul whose father, grandmother and great-grandfather all led India.

But elsewhere in the country, a broad array of Congress opponents are vowing to scupper the changes.

If anywhere in India might be expected to welcome major international firms, it should be Gujarat — a state whose relative prosperity over the last decade has been built in part on its success in attracting the likes of Ford and Shell.

Its Chief Minister Narendra Modi, a leader of the Hindu nationalist Bharatiya Janata Party (BJP), has even instigated a campaign called “Vibrant Gujarat” to draw in investors.

In a recent interview with AFP, Modi's comments that “only economic reforms can improve the lives of millions across India” appeared to echo government policy — before he promptly slapped down the proposals.

“The federal government did not take our opinion before introducing the reform,” said Modi whose BJP is hoping to unseat Congress in 2014.

The BJP says an estimated 50 million “mom and pop stores” will go bust under Singh's plans to let foreign firms open supermarkets for the first time in India.

While the opposition from the right is inspired in part by an instinctive desire to support small businesses, the left has a deep suspicion of Western giants.